Abstract

Rini Dian Sari, 2012; The Influence of Free Cash Flow and Profitability
toward Investment opportunity set on Company listed in Indonesian Stock
Exchange.
The purposes of this research are 1) to know the influence of the free cash
flow toward investment opportunity set, 2) to know the influence of the
profitability toward investment opportunity set, and 3) to know the influence of the
free cash flow and profitability toward investment opportunity set. Data in this
research are taken from companies listed in Indonesian Stock Exchange over
three years for period 2009 until 2011. This research used the purposive sampling
method. The sample of this research consists of 39 companies that meet the
criteria. Proxies are used to Investment Opportunity Set in this research is market
to book value ratio of assets (MVABVA). The method of data analysis in this
research is the method of statistical analysis with using Statistical Product and
Service Solution (SPSS) program version 16 with multiple linear regression
approach.
The results of this research indicate that : 1) Free cash flow has significant
influence toward investment opportunity set 2) Profitability has significant
influence toward investment opportunity set and 3) Free cash flow and
profitability have significant influence simultaneously toward investment
opportunity set.
Keywords : Free cash flow, Profitability and Investment opportunity set.